Deal allows Tesla to sell cars in Ohio

Tesla representative John Van Cleave, right, shows customers Sarah and Robert Reynolds, left, and Vince Giardina, a new Tesla all electric car, Monday, March 17, 2014, at a Tesla showroom inside the Kenwood Towne Centre in Cincinnati. Ohio auto dealers are sparring at the Statehouse with the California-based Tesla, which is selling it's next generation electric cars from three Ohio storefronts. Lawmakers in Ohio and other states are trying to block Tesla direct sales on grounds they undercut traditional auto dealerships. (AP Photo/Al Behrman)

Ohio auto dealers have struck an agreement that will allow Tesla Motors to sell its electric cars in the state.

The agreement with the Ohio Automobile Dealers Association was negotiated on Tuesday and approved by a Senate panel.

The bill allows Tesla to keep its existing stores in the Columbus and Cincinnati areas, and allows a third to open in Cleveland. It prohibits the company from opening any other stores.

The bill allows no other automaker to operate manufacturer-owned stores in the state.

Ohio was among states proposing to block Tesla from setting up additional direct-sales galleries on grounds they undercut traditional auto dealerships. Dealers saw Tesla as a threat to a system in which nearly all dealerships are independently owned franchises that are separate from manufacturers.